American asset manager Invesco has agreed to acquire the ETF business of Guggenheim Investments in a cash deal worth $1.2bn.

The acquired business includes $36.7bn of assets and will take Invesco’s ETF assets under management to $196bn. The deal will be funded with a combination of cash and debt.

The transaction is expected to be completed by the second quarter of 2018, subject to regulatory and shareholder approvals.

Invesco president and CEO Martin Flanagan said: “Guggenheim Investments’ ETF business is highly complementary to Invesco’s, and will enable us to provide one of the industry’s most comprehensive and innovative ranges of smart beta ETFs, including fixed income, equal-weight and self-indexed product offerings.

“The acquisition further expands our ability to build better, more diversified portfolios through our solutions capability, and enhances the range of capabilities available via Jemstep, our advisor-focused digital solution.  The addition enhances our ability to help meet client needs, which will help further accelerate the growth of our business.”

Earlier this year, Invesco acquired Source, a UK-based ETF provider, for an undisclosed sum.